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Guest Post: About That Shale Oil & Gas Miracle
Submitted by Jim Quinn of the Burning Platform blog,
Not a day goes by without a story in the MSM by some industry shill like Daniel Yergen about the imminent energy independence of the Great American Empire. Shale oil and gas will revolutionize the American energy prospects. We have hundreds of years of oil and gas under our feet. We will be a net exporter in the next few years. A glorious future awaits. Politicians tout the billions of barrels to be extracted from Bakken, Eagle Ford and the hundreds of untapped shale formations across the country. Wall Street puts out glowing investment analysis papers promoting the latest IPO. There’s just one little problem. It’s all hype.
Royal Dutch Shell is one of the biggest corporations in the world, with financial resources greater than 99% of all the organizations on earth. Their CEO probably knows a little bit more about oil exploration than the Wall Street systers and CNBC bimbos. His company has poured $24 billion into shale exploration in the U.S. It has been a huge failure. They have already written off $2.1 billion. They are trying to sell huge swaths of land in the Eagle Ford area. They are losing money in the shale oil and gas business. If Shell can’t make it profitable, who can?
The flow rates are too low. The extraction costs are too high. Companies will only invest in ventures where they have a reasonable chance to make money. Shell is a rational company, led by a rational man. He says they can’t make money. Of course, if oil prices reach $150 and natural gas prices reach $8, then companies can make money. All of the cheap easily accessible oil and gas have been accessed. Only the expensive hard to access oil and gas are left. The shyters never mention these facts when they tout our future energy independence.
Reality is a bitch. The truth will set you free.
Peter Voser says he regrets Shell’s huge bet on US shale
By Guy Chazan
Peter Voser said the failure of Royal Dutch Shell’s huge bet on US shale was a big regret of his time as chief executive of the company.
Speaking to the Financial Times three months before he is due to step down, Mr Voser also described the technical setbacks Shell has suffered in its exploration campaign off the coast of Alaska as one of his greatest disappointments in the job.
Shell has invested at least $24bn in so-called unconventional oil and gas in North America. But it is a bet that has yet to pay off. Its North American upstream business has struggled to turn a profit and in August Shell announced a strategic review of its US shale portfolio after taking a $2.1bn impairment. “Unconventionals did not exactly play out as planned,” Mr Voser said.
He will be replaced next year as head of Europe’s largest oil company by market value by Ben van Beurden, the company’s current head of refining and marketing.
A Swiss national, Mr Voser was part of the executive team that steadied Shell in the aftermath of a reserves misreporting scandal in 2004 that rocked investor confidence in the company.
As CEO from 2009, he is credited with overhauling the company’s notoriously complex structure and delivering some of the largest projects in Shell’s history, including a $19bn gas-to-liquids plant in Qatar.
He also reaffirmed Shell’s status as one of the leading innovators in the oil industry by moving ahead with the world’s first floating liquefied natural gas project.
But his last months in the job were tarnished by Shell’s setbacks in the US. Like other majors, it entered the American shale sector late in the game and was accused by some investors of overpaying for assets. Its earnings were then hit when a supply boom pushed US gas prices to 10-year lows.
As well as its $2.1bn writedown, mostly related to its US tight oil assets, Shell also said its US exploration and production business was lossmaking and would likely remain so to the end of the year and possibly beyond.
Just last month, Shell said it had put its acreage in the Eagle Ford shale in Texas up for sale, as part of a strategic review of its US shale portfolio.
Mr Voser said Shell’s Upstream Americas business was in the red because of a “strategic decision to slow down” on shale in the face of low gas prices. “Therefore you are hit with more than $3bn of depreciation whilst you don’t have the revenues against it,” he said.
He also acknowledged that exploration results in the US shales had been disappointing. “We expected higher flow rates and therefore more scalability for a company like Shell,” he said.
Shell’s US unconventional oil and gas operation was an “emerging strategic business which needs attention, needs fixing over the next two, three, four years”. He said an expected increase in the company’s tight oil production in the US “will help us get into a more reasonable profit and cash position in the future”.
Mr Voser also said rhetoric about the US shale revolution being exported to other countries was “hyped”, and that the rest of the world was in an early “exploration phase” which could yield “negative surprises”.
He singled out China, where Shell has drilled 22 wells, as one of the most prospective countries for shale gas, but warned that costs there were higher than in the US.
Mr Voser acknowledged problems in Alaska, where Shell has spent nearly $5bn on an offshore exploration campaign but has yet to complete a single well, amid regulatory and technical problems.
He pointed to the failure of a containment dome, a piece of equipment designed to catch any oil leaking on to the seabed, which was damaged during testing last year.
“That was a big disappointment to me personally,” he said. The incident forced Shell to delay its drilling plans, and Mr Voser said the company still didn’t know “if we’ll go back [into Alaskan waters] in 2014 or 2015”.
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When you have to suck on your straw harder it means your beverage is almost empty.
Kind of obvious that squeezing oil out of shale will have rapidly diminishing returns.
Nothing is obvious in the land of wishful thinking.
Shell is a rational company, led by a rational man. He says they can’t make money. Of course, if oil prices reach $150 and natural gas prices reach $8, then companies can make money. All of the cheap easily accessible oil and gas have been accessed. Only the expensive hard to access oil and gas are left. The shyters never mention these facts when they tout our future energy independence.
Come on, this is self-contradictory bullshit.
If only the expensive, hard to access stuff is left why are prices so low?
Like other majors, [Shell] entered the American shale sector late in the game and was accused by some investors of overpaying for assets. Its earnings were then hit when a supply boom pushed US gas prices to 10-year lows.
Gee, that's a shame! I thought you just said that Shell's CEO "probably knows a little bit more about oil exploration than the Wall Street systers and CNBC bimbos."
So, let me get this straight: we still have an abundant source of cheap, fairly clean, domestic energy but unfortunately there is giant foreign E&P out there which can't figure out how to make money off it. Do I have that right?
Let me get my hanky....*sniff...*sniff*...
OK, yes, I'm willing to live with that trade-off.
30 years ago,some bumper stickers that I would see : THE HELL with SHELL. I sure hope this did not go unfavorably towards Queen Beatrix as all the ROYALS are just fine people doing GOD'S work. sarc.
Today would that be PUT A HEX ON EXXON?
the US oil mastodons will end up like the dinosaurs; one day they will go belly up as they don't know how to do anything else like the dinosaurs of old.
The Shell plays and the Shell Shenanigans in cheating on their reserves to please the Reaganista 80s song of cheap oil thanks to "ever increasing reserves galore", that back fired once Chindia guzzling destroyed their tinsel veil, is a typical example of the corruption of crony oil capitalism, the new battleships of PAx Americana post 1945 as was the East India for Rule Britannia; as will be Google tomorrow and as is Apple today.
Today, we hope fossil will win the day again; I wonder. As the economics of energy are slanted in favour of Oligarchy and tax perks; it'll take more power balancing movement to bring the comparitive advantage of alternatives to the helm. Coming down the experience curve requires no barriers to entry...and concerted R/D in those tehcnologies something the Oil majors not only did not encourage they even hindered.
"If Shell can’t make it profitable, who can?"
The firms that paid a reasonable price for the leases, that's who. RDS was way late to the party, got taken by Pegula, et al, and lost their ass.
EQT, for example, has a long history of operating very, very profitably in the Marcellus, and will continue to, because they pay attention to costs.
Quinn paints the whole sector with the same broad brush, and gets it completely wrong; RDS was just dumb.
Yes, exactly, cs. This issue of shale oil seems to spark some emotional response from so many, including many of my fellow ZH'rs.
As the incredible rate of technological innovation (esp in the area of well completion and stimulation) continues, the production numbers will continue to explode (Statoil is producing 5,000 barrels per day wells) as costs continue to plummet.(Multi well drilling per pad)
Biggest excitement - to me anyway - is the soon to be embraced waterless fracking technology. Most water related issues will be bypassed, truck traffic near eliminated, and world wide shale reservoirs will be in play even where water is scarce.
How long will those wells continue to produce 5000 barrels per day? I assume you are chatting about tight oil... not shale gas...
What does the historical depletion curve look like on those wells????
Can you define what a high decline rate is for our fellow ZHers and what they typically look like for shale oil (tight oil, not shale gas which is what the article was about... but while we are at it why don't you explain both)?
Here is a old Oil Drum article explaining some of the gory details of shale oil.....
http://www.theoildrum.com/node/10102#more
And if you want to talk about Shale Gas here is a Forbes article
http://www.forbes.com/sites/michaellynch/2013/09/02/shale-gas-production...
With regards to waterless fracking ie LPG, liquefied petroleum gas Technology..(gelled propane and some other "witches brew of resin coated sand" to get the viscosity) that has some promise but it is going to add to the bottom line... looks like it has a much higher initial cost and will result in a tighter EIOER..... but it really is to soon to say one way or the other.
Tight oil and shale gas might buy us time but it is NOT going to even begin to address the fundamental underlying problems.....
Great questions, all, Hard, According to the charts accompanying this article (sourced originally from N.D. state people -a no nonsense bunch from my personal experience), after one year and 80% depletion, said well will produce 1,000 bbl/day. Ten years out - so sez the chart - about 500 bbl/day. Multiplying all by today's $100/bbl should show why there is so much economic activity in this area.
Now, this is all just one well. The newer multi well per pad techniques may show an increase in these numbers by a factor of 4. And that is just one formation, in this case the middle bench (layer) of the Bakken. If the lower, known Three Forks is as productive as Hamm has recently predicted, these numbers may double yet again.
As for your asking me to define what a "high" decline rate is ... well, beats me. That chart sure looks pretty precipitous for the first year or so. And yet it looks like it still produces for decades. I know those poor bastards in Pennsylvania are still collecting oil by the gallons per day 150 years on now. Beats aluminum cans and plastic bottles, I guess.
All this might best be viewed through the lens of the ever-changing technological advances which are nullifying virtually all predictive analysis of even a year or so ago.
Don't know much about the gas stuff, but if Dresser-Rand's soon-to-be-introduced mobile, micro gas liquification plants succeed, virtually all the currently flared off gas could be captured, monetized, and even re-injected into the well to frac so as not to need water. Heady stuff.
I will read your links to morrow and I thank you for posting them.
I miss communicating with the Oil Drum people, esp Rockiman. When the BP blowout was raging a few years back, I both followed that site and contributed from my experience of having worked several years on offshore oil rigs.
BTW, if it means anything, I am a cold-fusion fan and a die hard Tesla groupie (the man NOT the company).
Like wind power, it too has improved vastly. It still can't compete with coal. Eventually we will go back to coal, then on a long enough time line, wood. The reason for all these new and amazing technologies is because of EROI. The EROI wall that will be hit causing a major train wreck in energy production/ cheap electricity, heating, fuel is still a few years down the track. Sure waterless fracking will add some mile to the train track, but the train wreck is still coming.
I call horseshit on your coal-wind comparison...
Unless you are selling the Kochs calculation of pricing the externalities...
We're in a weird spot.
There used to be something of a correlation between the change in price of a barrel of oil and a BOE of Natural Gas.
There has been a recent divergence. An extreme divergence. Gas is super cheap. Oil is relatively expensive.
Not sure one can say that this means extracting gas (and NGLs) from shale is a bust in America. Prices change.
So, bottom line; the oil and gas business is scaling down, smaller companies w/lower operating costs can compete successfully against larger multi-national oil companies who need bigger economies of scale. A smaller energy industry is supplying a smaller gross economy. An economy that can only support a much, much lower debt load. Eventually, this smaller economy, worth much less than current stock valuations indicate, will have to recalibrate. It's this recalibration to lower valuations that the Fed is desperate to stop.
Had to read that a few times but I got it!
It's called Margin Compression........
So, because Shell's CEO made some lousy cap.ex and acquisitions, we should walk away from shale oil? Lots of others have made lots of money. Should we rely on solar panels and fairy dust for power?? Good luck with that.
There is a little concept called EROEI...... it goes like this
"Energy Returned on Energy Invested. Imagine that 10 barrels of oil exist 1,000 feet below your house, trapped in porous rock. If you need the energy-equivalent of 9 barrels of oil (gasoline or diesel powered equipment) to raise that oil out the ground and process it into usable fuel, you’ve only really extracted 1 barrel of oil (your net return). In the real world, you also have to include the cost of transporting the oil to refineries and gas stations at the end of the supply-chain."
So what is the EROEI of Shale oil????????
Contrast the excerpt below about Saudi Arabia's wells...easily drilled, easily stored, easily shipped,light sweet crude...probably costs about $10/bbl to pump and would still turn out 1/3 of what it did 45 years ago....the mirage is thinking that the US can drill and extract any amount that will slow the steady rising cost of the lifeblood of this country. Mark my words, we will be heavy into coal within 15 years again.
In 1982, after 45 years of nearly continuous output, Dammam No. 7 was taken out of production because of slack demand. However, the well is still capable of turning out about 1,800 barrels a day -and, as always, without a pump. And recently, "the mother of wells" produced what one might call a new child of sorts. No. 7's second wellhead, which had been in use from 1952 until 1978, was refurbished and mounted on a pedestal at EXPEC's entranceway as a symbol of the Aramco enterprise. The monument is a vivid reminder to all who pass by of how, on a nearby hill, Dammam No. 7 launched Saudi Arabia's petroleum industry 50 years ago.
Your thinking is precise but you don't extrapolate to the extent of reality.
You eat oil. You don't eat coal. I don't mean fertilizer. I mean fuel. The tractors. The trucks that stock the shelves.
If oil's flow rate declines, people start to die. Period. And they will die in the US first. Car races are slack. Not much else is. People will start to die when oil is scarce. Economics as a science already has started.
Note that even from the oil focused folks you won't hear this sort of extreme assertion. They have evaluated such things as undercutting their broad credibility.
I'm too old to care if anyone believes me.
Guessing the same about coal but sooner, as stated in another post. I work in the power industry, and am watching this train wreck from the switchyard.
But, but, but...Jeb Clampet said there was earl there....Texas Tea....
....a'bubblin' crude.....
Given the view out my office window is a drilling rig perhaps I can make an informed comment here...
Sitting out here in the middle of the Eagleford... I can tell you that the smaller independents and the more forward thinking mid/majors are drilling and completing these wells in HALF the time that Shell and some of the other majors are. That means half the drilling cost. We complete them more quickly as well. So I am calling the premise of this article B.S.
+100
Do you have any data and web links to back your statements up? Or is this just a gut feel.....
Yes the big boys always have more overhead... but they don't stay big boys if the are not prudent in their business models....are you looking at the "whole picture" or just the slice you see out of your window?
C'mon now, Hard. Lottsa big boys have gone down badly in our lifetimes, frequently by missing emerging paradigms ... Kodak, Pan Am, Compaq. Woolworths. IBM woulda but for Gerstner. Microsoft is lookin a little long term shaky and the fact that Japanese - for the first time evah are buying Airbus - has to be rattling Boeing. History is replete with "imprudent" industrial behemoths.
Shale is being successfully expoited by small 'lean and mean' oil & gas comapnies. Some wells in Pennsyvania have costs of $2.00 an mcf of NG. Even Shell could make money doing that.
However, it's well known that a lot of marginal shale plays (costs of $7.00 or higher) were sold to foreigners (Shell), knowing full well they'd never make money until the price went back up. The idea was to make the foreigners pay to steal our technology and use it back home.
Shell is a behemoth, and like all big organizations (think US Gov here), it is inefficient and bloated. The memo was lost in trasnlation.
But, the idea that th US will be fossil fuel independent is ridiculous. Saudi Arabia started out with over 200 Billion Barrels, but today a giant discoverey might get hyped at 5-10 Billion barrels. In end it will probably deliver only a fraction of that. Still a lot of oil, but these are diminishing returns.
We are slowly running out of oil. We have used the cheap, easy and high grade half of the worlds supply. The remaining half is expensive, difficult, and low grade. The price will go up, and we will pump a lot of shale gas and oil. But it won't be anywhere near enough for anybody to become independent.
We needn't worry about Shell because they recently took an oilfield in Iraq in production that soon should produce 175,000 barrels per day and this is only the beginning. It took 10 years, tens of thousands of dead Iraqies and 5,000 dead Americans but hey: Mission accomplished!
http://online.wsj.com/article/SB1000142405270230344200457911903318422393...
Shell's contract will grant them about $2/barrel of that flow. That's quite a lot below the norm. Iraq drove hard bargains with all the oil companies, but the downside of hard bargains is companies drag their feet. They don't have much incentive to get it to flow.
Of course there is going to be hype for the alternative oil sector. Our money is debt and technically backed only by confidence. An illusion has to be maintained that the past 150 years of lower left to upper right on the charts for energy production can go on forever. Can't let the cat out of the bag that debt is only chasing more debt.
Debt based economic models are fine as long as at the end of the day everybody is getting moar. Once the cat is outta da bag that everybody is getting less then confidence in the debt based model is lost.
The next 150 years ain't gonna be nothin' like the last 150.
Conventional crude oil production peaked in 2005 -- is it a coincidence that gasoline demand also peaked in 2005 even though millions of vehicles have been added to the global fleet since then?
"He singled out China, where Shell has drilled 22 wells, as one of the most prospective countries for shale gas, but warned that costs there were higher than in the US"
every frickin thing COSTS LESS & COMES FROM China but RDS costs more than US.
says all u need to kno about RDS
If it was all hype - how come I can now BBQ all afternoon on my natural gas BBQ for fifteen cents? :) ...thank you.
Nobody(in the U.S. anyway) cares about energy return on energy invested--they only care about dollar return on dollar invested. If those millions of cars that are produced every year ran on natural gas then you would see much higher prices for your grillin. Hydro frackin' is primarily about nat gas, the part about crude oil is hype.
The water used to irrigate a golf course remains in the ecosystem. Not so much for the water used in fracking.
They turn around and take fracking waste water and fertilise crop fields! LOL its the truth!
Note: Every $10 increase in the price of a barrel of oil chops 0.5% off GDP in developed nations.
THE FRACKING PONZI SCHEME
Robert Ayres, a scientist and professor at the Paris-based INSEAD business school, wrote recently that a "mini-bubble" is being inflated by shale gas enthusiasts. “Drilling for oil in the U.S. in 2012 was at the rate of 25,000 new wells per year, just to keep output at the same level as it was in the year 2000, when only 5,000 wells were drilled." http://www.forbes.com/sites/insead/2013/05/08/shale-oil-and-gas-the-contrarian-view/
Why America's Shale Oil Boom Could End Sooner Than You Think
http://www.forbes.com/sites/christopherhelman/2013/06/13/why-americas-shale-oil-boom-could-end-sooner-than-you-think/
FRACKING WILL CREATE AN ECONOMIC CRISIS
Overinflated industry claims could pull the rug out from optimistic growth forecasts within just five years. A report released in March by the Berlin-based Energy Watch Group (EWG), a group of European scientists, undertook a comprehensive assessment of the availability and production rates for global oil and gas production, concluding that: "... world oil production has not increased anymore but has entered a plateau since about 2005." Crude oil production was "already in slight decline since about 2008."
http://www.guardian.co.uk/environment/earth-insight/2013/jun/21/shale-gas-peak-oil-economic-crisis
FRACKING OUR WAY TO A TOXIC PLANET
Elevated levels of methane, ethane and propane gases were found in drinking water wells in Pennsylvania, close to operations that shake natural gas loose from underground shale formations in a process known as fracking, scientists reported on Monday. Mr. Johnson and his colleagues found 82 per cent of drinking water samples contained methane, with concentrations six times higher for homes within 1 kilometre of natural gas wells than for homes farther away. Ethane concentrations were 23 times higher for homes close to natural gas wells; propane was detected in 10 drinking water wells, also within 1 km of a natural gas well.
http://www.theglobeandmail.com/report-on-business/industry-news/energy-and-resources/methane-found-in-drinking-water-near-natural-gas-wells-study/article12783760/
POISONING OUR LAND
Over the past several decades, U.S. industries have injected more than 30 trillion gallons of toxic liquid deep into the earth, using broad expanses of the nation's geology as an invisible dumping ground. No company would be allowed to pour such dangerous chemicals into the rivers or onto the soil. But until recently, scientists and environmental officials have assumed that deep layers of rock beneath the earth would safely entomb the waste for millennia.
There are growing signs they were mistaken (or lying of course)
http://www.scientificamerican.com/article.cfm?id=are-fracking-wastewater-wells-poisoning-ground-beneath-our-feeth
Fracking is booming in the U.S. because, "money" can be conjured out of thin air here. Without the money conjuring capability, fracking is a bust.
Money is free for the right people, and they are the ones that 'know' fracking is the new MBS. Since the fed has eliminated any possibility for moderate return, all that's left if to go for broke and roll into the oil casino. And the money made in this last great rush is not going to be made by the oil companies, but by the suppliers, just like back in the gold rush days. About the time that interest rates come back, all that money will evaporate just like the gold rush days. Ghost towns and raped landscapes will be all that is left, just like in the gold rush days.
I suggest skeptics take a four-day road trip to North Dakota, Eastern Wyoming, the East Basin area of Utah, etc. Good luck finding a motel room, be prepared to rough it and pay a premium. Going on 3 years now and I've never seen such a boom. I don't hear many reports of significant drop-off in production from the initial wells either. Plenty that report the opposite though. The players aren't the Shell/Chevron/BP companies of the world, their business models are far too expensive. Doesn't surprise me a bit they are taking it in the shorts.
I am somewhat surprised and disappointed regarding these past two ZH posts on shale oil plays. The amount of emotion versus fact seems high.
The above chart shows a 1,000 barrel IP (Initial Production, aka first day's output). At $100/barrel, that well throws off near 100k in first few weeks. At 20% output after first year, the well is throwing off 20k PER DAY. Ten years on - according to the chart - this well is throwing off $10,000 EACH DAY. Maybe that is insufficient for Shell, but I and many others would snatch that up in a heartbeat. BTW, first yea'rs gross revenues, as per the chart - and at $100/barrel more than pays off the 8 million or so investment.
Biggest unappreciated fact regarding the Bakken, IMHO, is the stunning pace of technological advancement!!! Particularly in the well completion/stimulation aspects.
Statoil just punched a couple of holes producing well over 5,000 barrels a day. Now multiply the above chart numbers by five.
The next big tech impact may well be waterless fracking. An outfit in Canada has successfully fracked a couple thousand wells without water.
One fact that has knocked me on my ass is the soon-to-be introduced, world's first micro/mobile gas liquification plant by Dresser-Rand out of Houston. This baby will be able to pull onto location on a standard, 53 foot rig, hook up in a few hours, and captcha/monetize all that flared gas currently heating and lighting the North Dakota skies. In addition, it will liquify the targeted hole's gas to enable it to be re-injected for ... voila ... waterless fracking. 80 to 90% of the current truck traffic will not be needed. The water related issues will become moot.
Most significantly of all, though, is how this may open up much of the world's shale rich but water scarce areas.
This sucka, designed by a braniac outfit out of Tarrytown NY - Expansion Energy - promises to do everything but grow hair on your head and make your dick bigger ... and some egghead is prob working on that right now ...
Edit: Revenue first few weeks should be in excess of one MEEEELLYUN DOLLAHS.
Whoo hoo, a whole 5,000 barrels per day! wow! dammit boy!
The current level of global complexity is built on oil wells that produce 200,000 barrels per day for 20 years on average, not wells that produce 800 barrels per day on average and go into terminal decline in less than 1 year on average.
So ... you think the world may be a little too complex for it's hydrocarbon britches?
BTW, can you point me in the direction of a single oil well in the world that throws off 200k barrels a day? Near 20 thou barrels an hour iz bokoo crude, bro.
Replace the word well with field and the outcome is worse for fracking versus conventional.
BTW, last I heard there is 24 hours in a day. 200,000 divided by 24 = 8333 per hour.
speaking of emotion vs. fact.
"biggest unappreciated fact .... IMHO" this is an emotional argument if I have ever seen one.
"Another Fact - that has knocked me on my ass" without a reference it is hearsay, or opinion.
This technology is still in the test phase, and is yet unproven. Hence the use of the verb tense - will be.
"Some braniac outfit out of Tarrytown" (where undoubtedly the next silicon valley lies), again pretty emotional.
That having been said I am googling Expansion Energy to see what they are about. Do you work for them?
Ok, so I did a little research on Expansion Energy. Sorry to report that they do not have scientists, physicists, engineers in bulk working for them down in the labs.
They are a carpet bagging middleman insertion company that creates broad stroke patents and or buys them up. They then sell the license / idea for a company like Dresser to do the real research, engineering and capital investment. If the companies are able to utilize the newly developed technology they get a cut in addition to the licensing fee.
From their website on this amazing new game changing technology.......This is literally and figuratively a pipe dream at the moment.
The outcome of this endeavor is our patented "VRGE(TM)" (pronounced "VeRGE") "dry fracturing" technology (US Patent # 8,342,246) -- available for license. Instead of water, VRGE utilizes cryogenically processed natural gas from nearby wells or from the targeted hydrocarbon formation itself as the fracturing medium and as part of a proprietary, non-toxic proppant-delivery system.
VRGE creates "CCNG(TM)" (cold compressed natural gas) at the well site, ideally by using Expansion Energy's
"VX Cycle" small-scale LNG/CCNG technology
. Expansion Energy refers to the CCNG as "Metacritical(TM)" phase natural gas. The Metacritical(TM) NG (CCNG) is then pumped to high pressure before expanding it into high-pressure CNG and blending it with a proprietary, foam-based proppant delivery system. (Pumping a quasi-liquid like CCNG requires far less energy than compressing a gas.) This "gas-energized" fluid is then sent down-hole where it fractures the formation and holds open the fissures in the formation with proppant delivered by the foam system. "Energized" fracturing fluids (such as those using CO2 or nitrogen) have been shown to increase well production.
Yeah, ya got me on the math there ... too tired to take off my shoes and use my toes for the long division. BUT ... if you did mean 200 thousand per day PER FIELD, how does that square with the Bakken producing bout 800 thou per day now?
I too am in the energy business. Coal is still a four letter word.....
For every megawatt produced by a solar / wind plant, utilities have to have a tried and true back up megawatt from peakers (simple cycle) and or combined cycle or even older coal plants. So as government subsidies continue to pour in and are producing wind and solar plants, gas plants are being built to back up that green energy.
Take the subsidy out, and the "advances in the technology" still can't keep wind or solar profitable.
Coal will be the reluctant backstop again in a few years. My guess would be a reluctant return to coal in 5-10 year period, after the LNG and Shale Gas prices are no longer competitive/ subsidized.